Kakao back in profit for 3Q

​The scramble to monetise the company's messenger app has paid off in the third quarter for Kakao, with increased revenue in ecommerce and advertising, as well as its mobile division.
Written by Philip Iglauer, Contributor

The South Korean internet company Kakao on Thursday reported profit for the third quarter, in addition to a good performance in its mobile-related business.

Kakao reported net profit of 14.8 billion won ($12.78 million) for the third quarter ending in September, in contrast to the company's net loss of 6.31 billion won ($5.44 million) for the third quarter of 2014.

Revenue for the third quarter this year was 229.6 billion won ($198.27 million) -- an increase of 7.8 billion won over 221.8 billion won reported for the same quarter last year.

Kakao decreased its reliance on online ads year-on-year and increased its mobile business' share of total revenue to 56 percent, with the move to mobile a strategic goal for the company.

Kakao's ecommerce division leaped 97.8 percent year-on-year to 15.3 billion won ($13.21 million) from 7.75 billion won in the third quarter of 2014, the company said in a statement, adding that "introduction of the Special Price tab and continued enrichment in product lineup in Kakao Talk's Gift Store attributed to a 12.1 percent revenue increase quarter on quarter".

The company said the number of monthly active users of its messenger app, KakaoTalk, increased to about 39 million users.

For advertising, revenue edged up 0.7 of a percentage point to 142.9 billion won, while the gaming business suffered a 23.8 percent drop in sales to 51.4 billion won ($44.38 million) as it offloaded shares of online game developer OnNet Co.

Kakao has been focused on leveraging its mobile platform through the launch of a slew of new O2O businesses, such as KakaoTaxi and Kakao Pay. As such, the company invested 213.4 billion won ($184.28 million).

KakaoTaxi has 180,000 registered drivers and received 37 million requests in the seven months since the launch of the KakaoTaxi ride app.

Kakao said it is focused on building on-demand businesses based on what the company described as its mobile lifestyle platform, and said that "on-demand" refers to "the goal of delivering everything users need, unbound by time or location".

The company aims to link several industries, including finance, gaming, shopping, and transport to the mobile platform. "Kakao will continue to connect various sectors of the economy ranging from O2O, content, search, game, ads and finance, and embrace innovative attempts and challenges to strengthen its position as a mobile lifestyle platform company," the company said in a statement.

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